Gold Prices Hit New Record High Ahead Of Fed Meeting: Rate Cuts Could Boost Safe Haven Demand, Say Analysts

Gold prices surged on Monday to hit a new all-time high, as investors flocked to the safe-haven asset ahead of the Federal Reserve’s interest rate decision on Wednesday.

Gold futures maturing in December surged nearly 1% to hover around $3,719 at the time of writing, rising on the back of increased hopes of the Fed cutting interest rates on Wednesday.

In a recent note, analysts at ING Think noted that “lower borrowing costs usually benefit precious metals, which do not pay interest.”

Copper prices also surged on Monday, reaching a 15-month high, according to a Bloomberg report, with the price rising to $10,173 per ton.

Spot gold prices were up 1% at the time of writing, hovering at $3,681 an ounce. Over the past month, the yellow metal has appreciated 10%, while its one-year returns stood at 43%.

Ahead of the FOMC meeting, the CME FedWatch tool points to a 94.1% probability of the Fed cutting interest rates by 25 basis points.

Meanwhile, U.S. equities gained in Monday’s midday trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.51%, while the Invesco QQQ Trust (QQQ) gained 0.7%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The SPDR Gold Shares ETF (GLD) was up 1.07% at the time of writing, while the iShares Gold Trust ETF (IAU) was up 1.05%. The GLD and IAU ETFs have surged nearly 40% year-to-date.

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